Killing My Baby: Why I Shut Down My Longest-Running Business

This post may contain affiliate links. Please read my disclosure for more info.

This is a tough post to write.

This summer I pulled the plug on ShoeSniper, my original side hustle and my longest running and most successful business.

A moment of silence.

It wasn’t an easy decision, but I was confident it was time to move on. I think this is an important story to share because most of what you read in the entrepreneurship world is about perseverance and “never giving up.”

There are dozens of wise quotes about entrepreneurial tenacity, such as “Quitters never win and winners never quit.”

And all that rah rah stuff is great, but it’s not true. For many habits, experiments, and businesses there comes a time to quit; to give up; to throw in the towel.

And after almost 10 years, the sand ran out on ShoeSniper.

The Backstory

I’d been selling shoes as an affiliate in one form or another since 2004; as far as businesses go, it had a good run. In total, I helped sell well over $10 million worth of shoes for my advertising partners and helped thousands of customers find the best deal on footwear.

It was my original side hustle; my first real introduction to online marketing and making money on my own.

I owe a lot to the shoe business; it opened my eyes to the possibilities of entrepreneurship and was the vehicle that let me quit my job in 2008.

The site was a niche-specific comparison shopping engine – like a Pricegrabber or a NexTag but specifically for footwear. By focusing on one product vertical, my theory was I could:

Deliver a tighter algorithm with more accurate results.

Generate a higher click-through rate on search traffic by virtue of a shoe-specific domain name.

Negotiate exclusive deals with the retailers.

And all of that turned out to be true. I earned a commission on every sale that was referred through the site, and during the best months that turned out to be hundreds of dollars a day.

But the business was dying a slow painful death and I couldn’t revive it.

What Happened?

A combination of factors killed ShoeSniper.

First, the site was heavily reliant on paid search traffic and as you might imagine, the AdWords game has changed considerably since 2004-2005. For instance, over time:

The cost per click increased by 30-50% for the most valuable keywords.

Google implemented tougher “quality score” guidelines that make it difficult to advertise an affiliate website.

Text-based ads for products gave way to image-based products ads, but only ecommerce sites can use them. (Affiliates are out of luck.)

On top of that, the footwear retailers who paid me cut commissions considerably over the years, and really accelerated those efforts in 2012-2014. I went from a 14-15% average commission in 2005 to an 11-12% average commission in 2014, even after all the “top-performer” negotiated increases.

As a result, it became harder to and harder to generate profitable traffic. Since the site only earned $5-15 per sale, it was very much a volume-based business.

How ShoeSniper Worked

Imagine spending $10,000 a month on Google in 2007. At $0.40 a click, that would generate 25,000 targeted visitors. At a 4% conversion rate, that traffic would result in 1000 orders.

If the average order was worth a $15 commission, I’d have $15,000 in revenue – or $5k in gross profit after advertising expenses.

Fast forward to this year and it was a struggle to even spend that $10,000 on Google. I had the budget, and the searchers were definitely out there, but the keywords had either become too expensive for my ads to show or were dominated by image ads. If they’d show my ads at $0.50 a click, I’d have 20,000 visitors.

But because of discounting restrictions, now the traffic only converts at 3%, leaving me with 600 orders. With the reduced commission rates, maybe the average order value is only $12. That means I’m only generating revenue of $7200 from my $10k in ad spend.

On top of that, I still had to pay for hosting and maintenance, and my VA to help run the site.

It was a losing proposition, and I wasn’t sure what to do about it. We tried to optimize the site and focus on the most profitable brands and keywords, but as a volume-based operation, I could only cut so far.

The Business Faced Tough Times Before – what was different?

This year certainly wasn’t the first time ShoeSniper (formerly ShoesRUs.net) faced a life-threatening challenge.

In 2008, Google banned the site from advertising with them, saying it was “poor quality” and it’s sole purpose of existing was to send visitors to other sites. As an added bonus, this happened the day AFTER I quit my job.

Never mind the thousands of happy customers and the ironic fact that Google’s search engine’s sole purpose of existing was to send visitors to other sites!

After 3 incredibly stressful months and some site improvements, they finally admitted they made “an error” in their evaluation of the site, and reinstated my account.

In 2010, the site suffered from growing pains and had to be rebuilt from the ground up. To make matters worse, I was pissed off with the original development team and spent more than $10k on other useless contractors who couldn’t get the job done.

In 2011, California passed legislation that forced many retailers to terminate their relationships with California-based affiliates. Rather than lose my livelihood, I rented a studio apartment across the stateline in Nevada so I could stay in business.

(Two months later, they repealed the law and now have a loophole where out-of-state retailers can safely work with affiliates here.)

In each case, I did what I had to do to keep the business running.

But in 2014, the site was barely breaking even and actually losing money some months, especially after paying for hosting and my VA.

One Final Attempt

I wanted to make one last-ditch effort to salvage the site. My idea was essentially to 80/20 the shit out of it. Of the 500,000 products, only a handful of brands ever made any sales. Of the 40+ stores, the top 15 accounted for more than 98% of revenue.

In other words, we were churning through a TON of data on a daily basis, eating up a ton of processing power and bandwidth on products that were not adding to the bottom line. By re-working our entire data-processing system, which was a mish-mash of systems built over the course of nearly 10 years, maybe a leaner, meaner ShoeSniper could emerge.

Maybe I could piece together a few profitable months and set the site up for a sale.

It didn’t happen.

After 7 months of trying, my tech team failed to deliver a working version of the site to even test that idea. We’d agreed on a small contract at the onset, but I’d said all along I wasn’t comfortable spending more money on development for what I saw as a sinking ship.

When they came asking for additional investment to fund their ongoing efforts, I couldn’t stomach dumping any more money into the project. (Actually, they surprised me with an invoice for their fruitless efforts to that point, and an expensive add-on to continue working.)

Um, no, that’s not what we agreed on.

I told them the definition of insanity is doing the same thing and expecting different results; and handed over the keys to the site in exchange for them waiving the “amount due.” What they plan on doing with it, I have no idea.

I suspect they want to maintain it as a portfolio piece to attract new clients because it really is a complex site; and more consumer-facing than most of their other work.

Maybe someone else would have made a savvier exit, but I was sitting on a non-functional, unprofitable, money-sucking asset I was happy to be rid of. In fact, it was like a huge weight had been lifted off my shoulders.

The site was responsible for a disproportionate amount of stress in my life over the last year, and with all the problems, it just plain wasn’t fun to work on anymore.

Sure, I was sad to see it end this way after so many years, but I learned so many priceless lessons in running the business it was a fair exit in my mind.

Why Not Invest in SEO or Other Traffic Sources?

SEO for comparison shopping sites is difficult, especially given Google Shopping’s entry into the game. There’s not much unique content on any of the pages, and it can be tough to build links for product pages that are constantly going in and out of stock.

Still, not making an investment in SEO when times were good is a big regret. Maybe if I’d diverted some of the profits from the paid traffic into building an organic presence, I would have been able to keep the business alive.

Why Not Pivot?

I contemplated a couple “pivots” for the ShoeSniper, including licensing the technology or shifting to a more business-to-business model, where I could provide competitive pricing intelligence for the footwear retailers.

On the technology licensing, the idea was to sell a comparison shopping site software as a service to other aspiring affiliates. They wouldn’t have to reinvinent the wheel, but could instead tap into our data processing and data normalization tools for a monthly fee to build their own comparison shopping site in whatever vertical they chose.

The only problem was our technology didn’t work. It was unstable and constantly had errors with wide swaths of the database getting deleted without warning. It definitely wasn’t ready to be re-packaged and sold to a peer consumer, and would have required a big additional investment to get it there.

On the competitive pricing intelligence, I made a couple calls to find out how stores were currently solving this need. It turns out, they weren’t. Their internal teams set the prices or they were algorithmically based on sales rates and inventory levels.

So rather than invest more money into building a product there didn’t seem to be much demand for, I tabled that idea as well.

Why Not Sell?

Websites are typically sold on a multiple of current monthly profit, anywhere from 12-36 months, depending on the business’ history and other factors. With Empire Flippers, sellers can earn 20x monthly earnings in a sale.

I would have loved to sell, but the problem is 20x zero is still zero, and that’s what the project had been earning for much of the year.

I’d hoped to build it back up, if I could have got it to even just $1000 a month, that could have been a nice exit. But after months and months of trying to fix the technical problems, we weren’t getting any closer to a working solution and my heart just wasn’t in it.

I often get the question, “When do you know it’s time to give up and try something else?” And it’s difficult to answer, but in this case, I just felt it.

During previous challenging times, I HAD to make it work; it was my only income source. I was tied to it just like I could have been tied to a job.

This time, I was sufficiently diversified that it was OK to let it go. It still stings, and was an emotional loss to walk away from my longest running business, but I’ve got enough other projects going on to pay the bills and keep me busy.

And the good news is, they’re more fun to work on too :)

What’s Next?

I’m still working on the 8 income streams I outlined here, plus aiming to build new ones in 2015. My hope is with the extra hours freed up every month I’ll be able to channel that energy into some exciting new side hustles.

Your Turn

Have you ever had to shut down a business? Did you have any regrets? Or did it lead to bigger and better things?

Thanks for this detailed post!!! I can tell it was a hard one to write. It is so rare to find this sort of honesty and thoughtfulness and I think it is so important for learning and growth. I don’t look at this as a story of giving up, I see it as an example of how to cut your losses and move on to the next chapter which is in essence a story of perseverance. It also highlights how important it is to continue to innovate, especially when you deal in technologies. If you had not put a huge amount of effort in to continuously exploring different ways of earning income, you would be in a very different position right now.

Hey Nick, great story. I had a similar experience a couple years back. Had a site that did very well for a number of years and woke up one morning (right before my first child was born and right before another income source was flushed down the toilet) and my site had disappeared from Google. It had been in the top 3 for my main keyword for about a decade but the site traffic (and my income) went away overnight. Maybe I could have dumped a bunch of time into it to try and get the traffic back but at that point I knew it was time to move on. Very happy with where that decision has taken me. I know you will be too.

Great article. It has all the elements of real entrepreneurship: thinking outside the box, coming up with solutions, and dealing with hardships. Great read and I am sure it was a great experience overall, and you are stronger for it.

My advice: print a t-shirt with ShoeSniper logo for memories. I did that with my nearly dead comehike.com and the t-shirt brings back many nice memories.

What Austin said … and then some. For years now I have tired of reading the same sort of upbeat, rah rah, look at me go now sort of posts and then seen countless guys run up against one roadblock or another and quit.

Anyone can drive on a straight wide road with no traffic. What separates the “real drivers” from the “Oh, yeah, me too” folks is what happens when the road gets rough and stalled trucks block the way, or a sudden blowout threatens to throw you off the road and into the ditch.

Thanks so much for sharing. I’m sure all of us can learn a lot from this, and best of luck “hustling” onward.

I love this.
For me, shutting down a stream was when I switched from 9-5 to entrepreneur. I didn’t have a side hustle, I didn’t have money – I just knew I had to jump into the water.
It’s not the same as what you’re talking about; It’s not even close. BUT for me doing this felt like quitting, like giving up – and that was a great lesson learned about “letting go” vs “giving up”.
Good luck with your new projects – I know you’ll kick ass:)

Well the first thing I’ll say is ouch! I have been blogging shoes since 2009 & I too am facing a decision to end my blog and shift my focus. One thing about it, when your heart is no longer in it, you have to listen to that. While we all want to earn, I think its crazy to build a business and work at it when you no longer like it. For that kind of nonsense, I tell people, I’ll just start sending out resume’s. I commend you on making the decision and then doing what needed to be done. I’m still struggling with the thought of walking away from my shoe persona but like you, the passion is dying. I’m sure I could learn a lot from you so I’ll be lingering around now that I’ve found you to see what gems of knowledge I can run off with. :-)

Although I never had to shut down a website (yet), one of the things I believe is that everything has an “expiration date”. All things will end, no matter what, so having an exit strategy for what we do is important. Partnerships end (people die!), marriages (unfortunately), employee relationships, you get it. So kudos to you for having the courage to walk away from something that once was extremely important, and do it with dignity. We can all learn something from your experience. All the best to all your other endeavors!
Esly Carvalho, Ph.D. (from Brazil…)

This is awesome man – SO SO good to read this from a fellow entrepreneur (I mean, I wish the story ended differently, but you get the point ;)).

I’ve been going back and forth on one of my projects for 6 months now and sometimes the answer isn’t easy. It just hits you when it hits you, like you mentioned. I’m still in the middle of this “what to do” journey but I feel like I’m getting closer and closer (and skipping different hurdles, while shutting down others) in the process. And, I’m learning which is always good.

We’ll see what ends up happening with it, but regardless it’s posts like these that people like us can relate to. It’s not always rainbows and glitter running a biz as many people (*ahem* our “real life” friends) like to think ;)

Thank you for your candor and transparency to the process. You offer tremendous lessons for all of us. It’s so hard to tell the difference between an important obstacle (something that forces us to change direction towards a better solution) and a dead-end, but I think you’re right, one telling flag is when your heart isn’t in it. And best of all, you’ve opened up your time, heart and interests to things that now deserve your focus.

I had to walk away from the PMA earlier this year, not because I didn’t believe in it and not because I lost heart, but because we had taken very important but costly steps on behalf of the industry (primarily suing and winning a long drawn-out suit against the state of Illinois). I wouldn’t change a single decision, it was the right thing to do, even though we couldn’t afford to pay me any longer. And there’s a silver lining for me, it’s led me on a path to a new and exciting start-up, that I wouldn’t have arrived at if I hadn’t gone through all the struggles before.

Hi Nick
Thanks for sharing this story. I got to know all about you from the Udemy course and had no idea your background is in affiliate marketing.
I’m in exactly the same boat. I did affiliate marketing for about 7 years and had a good run as well — even sold a site for a few thousand dollars. But after everything that went on in that field as well as the many heartache that went along with it, I just had enough and have decided to stop doing it.
I’m still in that process of finding out what to do next. It’s scary — specially the income that’s decreasing every month — but I’m sure that in a few years time, I’ll be thankful I made this choice — I just wish I could fast forward my life.. :-)

Thanks for the honestly. I have tried so many businesses (most of them failures), that I realized at some point you have to discern when to hold ’em or fold ’em. My main venture now is holding steady, but seeing how it’s technology based, I’m already making plans for back up income. I think you just have to have that resilience in business. The day will inevitably come when a business just isn’t a good one anymore. The quicker you realize that and kill it, the sooner you can give birth to something more glorious and wonderful!

Great article. Even though you let your site go, it’s still an inspiration to me. You showed that affiliate based websites can be successful for a long time. Hopefully I can do the same with my sports website that promotes affiliate offers on sports merchandise. On a second note, why didn’t you build a list?

Rookie mistake. I built a list, though it really wasn’t a focus and it was neglected big time. I didn’t know what I was doing and would just send mass-mailings from my Gmail account. Then I imported to MailChimp, but because people hadn’t heard from me in months and couldn’t remember signing up, they marked it has spam. I wrote a little about the errors of my ways over at Firepole Marketing last year: http://www.firepolemarketing.com/banned-by-mailchimp/